By early next year, China will likely
become a member of the World Trade Organization (WTO). For India, this is
a cause for both cheer and concern. In one go, it will open up the Chinese
market to Indian exports that are now constrained by the limits of
bilateral agreement. Once in WTO, China will have no choice but to provide
the most favoured nation status to India. But that's where the good news
for India ends. In a fight that promises to be unequal, India could get
mauled by the brute force of Chinese trade. Already, what India buys from
China is more than what it sells to the dragon nation. Since 1996-97,
India's exports to China have slid from Rs 615 crore to Rs 548 crore (last
fiscal). By contrast, India's imports from China in the same period have
shown a sharp upswing: from Rs 757 crore to Rs 1,293 crore. Notes B.
Bhattacharya, 56, Dean, Indian Institute of Foreign Trade: ''The threat
from China is very real.''

Next year also is the time when
quantitative restrictions on imports go. Greater economies in export will
enable China to sell its goods even cheaper. At the moment, 10 major
items-including organic and inorganic chemicals, electronic goods, coal,
medicines, textiles, and silk-make up 70 per cent of imports from China.
But the range could quickly widen to include leather, light engineering
products, and iron and steel.

In fact, a recent study by the Kiel
Institute in Germany is categorical that South Asian countries will be the
net losers when China joins the WTO. Another study, by trade economists
Bibek Debroy and Nilanjan Banik of the Rajiv Gandhi Foundation, reveals
that if Chinese exports were to prove 20 per cent cheaper, then India
would lose its export shares in lobsters, chemicals and garments. In the
last four years, there has been a flood of cheap imports into India from
China - tyres, bicycles, toys, plastics and dyes, and bulk drugs. So much
so that of the 47 anti-dumping duties imposed between 1997 and April,
2000, 21 were against China.

A big part of Chinese exporters' clout in
international markets comes from the huge subsidies their government doles
out. Explains Banik: ''Since China is not a member of the WTO, it indulges
in 'actional subsidies' through two methods: one, it forces foreign
companies operating in China to source a part of their raw materials
locally and two, it actually offers cash subsidy for exports.''

That's something even joining the WTO may
not change. Here's why: there are a lot of provincial subsidies that may
not be a part of the macro subsidies China will be obliged to remove as
part of the WTO agreement.

Small gains may come India's way because of
the MFN status. But given the fact that Indian exports comprise low
value-added products like iron ore, marine products, cotton yarn, and
fabrics, the benefits are unlikely to be significant. To move up the value
chain, Indian exporters will need to manufacture to global standards,
upgrade technology to keep pace with international competitors, and simply
become more aggressive.

To be fair to Indian exporters, though,
there are severe infrastructure constraints that blunt the competitive
edge. Power, ports, and roads are just some of them. Ultimately, the
economic environment must turn favourable if the Indian pachyderm is to
make its weight felt.

Its
nifty name belies its sinister origins. When the TJ's brand of
potato wafers and aloo bhujiyas reach select consumers on October 2,
2000, few are likely to realise (or worry) that they've come from
south-east Asia's largest prison in Delhi, Tihar Jail. If the
Director General of Prisons, Ajay Agrawal is to be believed, then
TJS will be as good as any other brand in the market. ''Taste it to
believe it,'' he brags.

The TJ's
project, the brainchild of a convict and launched seven months ago,
is part of the prisoner rehabilitation programme. With the help of a
consultant and quality advisor, a team of 40 convicts will churn out
100 kgs of chips and bhujiyas a month. Says Kiran Bedi, 50, Joint
Director (Training), Delhi Police: ''It's a nice way of keeping the
inmates busy and forcing their creativity.''

To begin
with, the products, priced at a competitive Rs 10 for 40 grams, will
be sold to governmental institutions such as schools, ministries,
and public sector undertakings. The profits from the venture will go
towards a Prisoner's Welfare Fund. If the products click, TJS will
expand the range to include potato sticks, dal moth, dal chana, and
mixed namkeen. A prison, or a profit centre? Corporates beware.

-Jaya
Basu

Despite its obvious benefits, the
government's decision to bring about consolidation in the oil sector isn't
buoying the spirits of the two oil giants-Indian Oil Corporation (IOC) and
Bharat Petroleum Corporation Ltd. (BPCL). The reason? The book value of
the companies that these two are supposed to buy-IOC is to acquire
Bongaigaon Refineries and Petrochemicals Ltd. (BRPL) and Chennai Petroleum
Ltd. (CPL); and BPCL takes over Kochi Refineries Ltd. (KRL) and Numaligarh
Refineries Ltd. (NRL)-is much higher than their market price. Says P.
Sugavanam, 53, CFO, IOC: ''At the most, there should be a 10-15 per cent
premium over the market price.''

On the face of it, IOC and BPCL are right
to haggle over price (See The Price-Value Equation). In truth, however,
they have little to complain about. Even at their book value, the target
companies cost much less than a new refinery. For instance, a 7-million
tonnes per annum (MTPA) refinery like KRL's costs Rs 7,000 crore in
contrast to its book value cost of Rs 700 crore. If at all, it is IOC
which should be complaining, because BRPL is nearly 26 years old, and has
an unviable capacity of 2.75 million tpa. To survive in the free market
regime-a key reason for the consolidation-BRPL will need larger economies
of scale and modern refining technology.

BPCL, on the other hand, has much to gain
from the investments. At present, its production at 8.87 mtpa is much
smaller than the 18.86 mtpa it sold last year. The shortfall is made up by
sourcing from other refineries. With KRL and NRL (3 mtpa) in its bag,
BPCL's capacity will soar to 18.87 mtpa. Says S.P. Gupta, 56, CFO,
Hindustan Petroleum Corporation: ''BPCL will gain in the long run,
depending on the price it has to pay.''

In any case, the acquisition price is to be
fixed jointly by the ministries of petroleum and finance, and will likely
reflect the book value and not the lower, market price. In the end, the
pressures of a growing fiscal deficit will overbear the grumblings
probably of oil companies.

Until the end of last month, all that the
greens of DLF Golf & Country Club had known in the name of
four-wheelers were its tiny golf carts. Then, it happened. Two new station
wagons were launched-within seven days of each other-on the lush greens in
Gurgaon, near Delhi. The first was Baleno Altura, a variant of Maruti
Udyog's three-box notchback, Baleno. And the other, Siena Weekend-from the
stables of Fiat India-is a modified version of Palio Weekend, which first
made its global appearance in 1996. Says Giovanni Ravina, 51, Managing
Director, Fiat India: ''Siena Weekend will help us further in breaking our
link from Padmini, which we stopped making 40 years ago.''

Maruti, in keeping with its policy of
steering clear of diesel vehicles (Zen diesel is the only such car in its
portfolio), has stuck to the same 1,600-cc petrol engine that powers the
Baleno. Fiat-which had a brief success with its diesel small car, Uno-has
opted for the cheaper fuel, although a petrol variant has also been
launched. The price: Rs 8.15 lakh ex-showroom (Delhi) for the Altura, and
Rs 7.27 lakh for the Siena Weekend petrol and Rs 7.87 lakh for the diesel
version. Points out Jagdish Khattar, 57, Managing Director, Maruti Udyog:
''Our strategy has been to create new segments.''

The critics, however, want a simple
question answered: will the stationwagons sell? ''Our research suggests
that station wagons will have a niche market, either as the second or even
third car in urban areas or in certain rural areas if the size is
appropriate and the fuel is diesel,'' claims B.V.R. Subbu, 45, Director
(Marketing & Sales) of Hyundai Motors India, which is not looking to
launch a stationwagon.

The two cars are positioned mainly as
lifestyle products, and neither manufacturer is dwelling on sales
projections. The target customers are successful executives in the 35-40
age group, who are now buying sports utility vehicles but don't really
need the 4x4 and other off-roader features. Will golf addicts bite?

Desperately seeking, well, not Susan, but
actuaries, insurance experts, marine law specialists, chief knowledge
officers ...the list goes on. As new sectors open up and some old jobs
die, corporate India's hunt for talent gets even more desperate.

Take actuaries, for example. Before the
opening up of the insurance sector, there was limited demand for
actuaries. But now they are considered hot properties in the job market.
According to an Ernst & Young report, the average age of actuaries in
India is about 55-same thing that disqualifies them for most corporate
jobs. Similarly, with increasing demand for knowledge in anti-dumping laws
or sports, entertainment, or media-related legal expertise, renowned law
firm Amarchand & Mangaldas & Suresh A. Shroff & Co. found that
there are precisely five anti-dumping experts in India. Affirms Pallavi
Shroff, 44, partner: ''In fields like anti-dumping, infrastructure, media
and sports law, there is a real dearth of specialists, considering the
sudden spurt in demand for them.''

Further, there are jobs that have morphed
with the changes in business and market scenario, and now demand skills
that the existing functionaries simply don't have. For instance, systems
managers now need to be knowledge managers and provide strategic direction
in infotech management. In hr, similarly, there is a need for business
exposure and accountability as a line function. And on the shopfloor, few
companies employ quality inspectors. Instead, they want quality assurance
experts.

What is the way out? ''Train managers and
rotate them cross-functionally in jobs like infotech and hr and develop
new talent in fields like actuarial practices,'' says Vinay Batra, 47,
Director, A.F. Ferguson. Meanwhile, pray hard that you don't have to hire
an actuary any time soon.